The battle lines in golf have been drawn, pitting the PGA Tour against some of its biggest stars who have decided to join the LIV Golf tour. LIV Golf Investments, which is backed by the Saudi Public Investment Fund (PIF), its majority shareholder, was launched last year with golf legend Greg Norman as its chief executive officer. PIF recently pledged a $2 billion investment to expand the organization’s efforts internationally.
So far, of the 48 golfers involved, the most high-profile names to join LIV Golf are Phil Mickelson and Dustin Johnson, who were reportedly offered $200 million and $125 million, respectively, to join the new tour. Additionally, LIV Golf is offering larger prize money payouts. In May, Justin Thomas won $2.7 million as the winner of the PGA Championship, while the winner of the LIV Golf tournament, which kicked off this week, will claim $4 million, the second place winner $2.1 million, and $1.5 will go to the golfer who places third.
In response, the PGA Tour suspended Mickelson and Johnson, along with 15 others, from its tours. “Their participation in the Saudi Golf League/LIV Golf event is in violation of our Tournament Regulations,” PGA Tour commissioner Jay Monahan stated in a pubic memo. “The same fate holds true for any other players who participate in future Saudi Golf League events in violation of our Regulations.”
Much of the controversy around the new tour, as well as the PGA’s reaction, has been framed as an issue of morality and concerns that the Saudi government’s Public Investment Fund might have undue influence over the upstart golf tour and its players. Citing the practice of “sportswashing,” that is, using investments in sports to cleanse a government’s image, golf insiders are using Mickelson’s own words to highlight the issue.
“They’re scary motherf—s to get involved with. We know they killed [Jamal]Khashoggi and have a horrible record on human rights. They execute people over there for being gay,” Mickelson said in a recent interview.
“Knowing all of this, why would I even consider [joining LIV Golf]? Because this is a once-in-a-lifetime opportunity to reshape how the PGA Tour operates,” said Mickelson. “Saudi money has finally given us that leverage… [The PGA Tour is] sitting on hundreds of millions of dollars worth of digital content we could be using for our social media feeds. The players need to own all of that. We played those shots, we created those moments, we should be the ones to profit.”
Similarly, during a press conference this week, Johnson defended his decision to join LIV Golf by saying, “I chose what’s best for me and my family.”
What’s “best” includes overall larger event purses that may ameliorate the recent loss of player sponsorships over optics around the LIV tour. The total tournament prize purses for LIV Golf add up to $25 million compared to the PGA’s $15 million. Also, LIV Golf’s Team Championship will add an additional $50 million prize purse to the players’ potential winnings. So, at least for Mickelson and Johnson, LIV Golf’s two biggest stars, the separation from the PGA appears to be primarily based on money.
Only a small portion of a top golfer’s earnings are derived from tour prize money—sponsorship money plays a major role. In 2019, Tiger Woods was estimated to have earned $45 million in sponsorship money compared to Mickelson’s $39 million and Johnson’s $26 million in the same year.
Nevertheless, the sports world, including its sponsors, appear to be torn on the issue. Mickelson’s usual sponsors, Heineken/Amstel, KPMG, Callaway, and Workday have all ended or paused their involvement with the golfer. Likewise, Johnson and fellow LIV Golf player Graeme McDowell both lost sponsorship deals with the Royal Bank of Canada following their decision to join the new golf tour.
Despite these sponsorship losses, the lure of LIV Golf’s larger prize purses seems to be enough to attract the sport’s leading players, for now.
The issue of being involved with the Saudi Public Investment Fund isn’t new—it’s something that has shadowed some of the biggest names in tech for years. Uber, Magic Leap, and Lucid Motors are among the companies with direct investment links to the Saudi fund. Other Saudi government-linked entities and individuals also hold major stakes in Lyft, Snap, and Twitter.
So while the sports world is currently in an uproar over LIV Golf, the relative silence on big tech’s Saudi cash entanglements suggests that the outrage may be short-lived.
The PGA’s highest-earning player, Woods, reportedly turned down a large offer to join LIV Golf. Although no offer number has been confirmed by Woods, he did address his decision to remain with the PGA Tour in December, saying, ”I have my viewpoint on how I see the game of golf, and I’ve supported the [PGA] tour and my foundation has run events on the tour for a number of years…I just think there’s a legacy to that.”
But as more of his competitors opt to take LIV Golf’s money, that could eventually change. The PGA’s move to ban LIV Golf players also stoked speculation that other major golf tours may follow suit, but this week the U.S. Open golf tour confirmed that it would not ban LIV Golf players from its events.